Powers v. Guardian Fire and Life Insurance Company

consequence is made to follow a change of the title to the property. It is certainly true that by a transfer of the title to the whole of the property to stranger the title would be changed, but we cannot presume that the parties intended to express that provision by the use of the word 'changed,' for as we have seen, they had already fully expressed it by the words which precede it in the contract. This latter word was deliberately used by the parties, and we cannot reject it as construing the contract; and as it neither limits nor qualifies those which precede it, we are bound to presume that the parties intended by its use to express some provision or condition of their contract which was not otherwise expressed. The effect of the provision is, then, that the policy would be avoided either by a transfer of the title of the property insured to a stranger, or by a change of the title to it. This conclusion can be avoided, as we think, only by disregarding the elementary rules of construction. The case turns then upon the question whether a change of the title of the property resulted upon the dissolution of the partnership and the sale by Smith to plaintiff of all of his interest in the property, and it seems to us there can be but one answer to this question. During the existence of the partnership it cannot be said that plaintiff had title to any specific share or interest in the property. His claim was to the proportion of the residue which should be found to be due to him upon the final balance of the accounts of the firm after the conversion of the assets and the liquidation of its debts. But upon the dissolution of the partnership, and the purchase by him of Smith's interest, he was vested with the absolute title to the whole of the property.

The conclusion we reach is sustained by the following authorities : Keeler v. Niagara Fire Ins. Co., 16 Wis. 523; Hartford Fire Ins. Co. v. Ross, 23 Ind. 180; Dix v. Mercantile Ins. Co., 22 Ill. 272; Wood v. Rutland Ins. Co., 31 Vt. 552."

In Drennen v. London Assurance Corporation, U. S. Circ., Minnesota, MILLER, J., charged the jury that a change or transfer between the partners would be no violation, but the introduction of a new partner avoided the policy. He said: "Many changes may take place in the title and also in the possession, without a sale or transfer of the property to another party; for instance, a sale by one partner to another has been held by the courts not to be such a sale or transfer as is included in this policy, and for the very obvious reason that the possession does not change; it remains where it was - the title remains, perhaps in the firm, although one member of the firm may have gone out; the question we have got to solve is whether the introduction of a new partner into the partnership firm whose goods are insured, is such a change as vests him with an interest which he did not have before, and vests another man with a right of control of the possession, and to have charge of the property, and will avoid this policy. Without going on to cite the authorities, we are both of the opinion that this is such a change as by that language was intended to avoid and forfeit the policy.

"The sale or the transmutation of the various interests between the partners themselves, and nobody else having the control, and leaving the possession where it was, does not invalidate the policy; but the introduction of a

Hedden v. Griffin.

new partner with an investiture of an interest in him, which he did not have before, does avoid the policy.

"There are two things with regard to which insurers are always cautious, tenacious and anxious. One of them is the character of the men with whom they make the contract, and the other is the character of the man who has possession of the property, especially if it be movable property that is insured; and it is easy to se why this is so. They may very well know that the man or men with whom they deal when the contract is made are cautious, prudent business men, honest and for a long time successful in business. With those men they contract without hesitation. They have a right to know who those men are with whom they contract with regard to the possession of the prop erty. They make a contract with A. because they know him, or because they have heard of his character — because they understand that he is honest and fair, and they deal with him just as you would deal with one whom you know to be reliable; you will seek to deal with honest men only. Now it is against all the principles of contracts to say that in dealing with one man or with two men, that those two can afterward, acting without the consent of the other party, introduce another man into the contract who has all the rights and all the control which those two had before; because that man may be known to be a scoundrel by the insurance company, and if that rule prevails the other parties have a right to introduce the veriest scum of the earth, and men who have half a dozen times been engaged in the destruction of property to get the insurance. So you may sell the goods insured, but you cannot sell the policy unless the company agrees to it. We are of the opinion that if Mr. Arndt was, within the meaning of that policy, introduced into that partnership, and became a member of it before the loss, and acquired an interest in the goods, the policy was forfeited.”

To the same effect is Biggs v. North Car. Home Ins. Co., 88 N. C. 141. See also Texas Bank, and Ins. Co. v. Cohen, 47 Tex. 406; s. c., 26 Am. Rep. 298.

HEDDEN V. GRIFFIN.

(136 Mass. 229.)

Agency action against insurance agent for fraud — damages.

One fraudulently induced by an insurance agent to take a policy may rescind the contract and recover from him the premium paid.*

A

CTION for fraud.

The opinion states the case.

The plaintiff

had judgment below.

*See Kroeger v. Pitcairn (101 Penn. St. 311), 47 Am. Rep. 718; Thompson

v. Phoenix Ins. Co. (75 Me. 55), 46 Am. Rep. 357.

VOL. XLIX — 4

Hedden v. Griffin.

W. S. B. Hopkins, for defendant.

F. P. Goulding & W. A. Gile, for plaintiff.

MORTON, C. J. In order to maintain an action of tort for deceit, it is necessary for the plaintiff to show that the false representations alleged in his declaration are representations of material facts calculated to deceive him and induce him to act. Representations as to matters which are merely collateral, and do not constitute essential elements of the contract into which the plaintiff is induced to enter, are not sufficient. It was held in the case of Penn Ins. Co. v. Crane, 134 Mass. 56; s. c., 45 Am. Rep. 282, that representations like those alleged in the declaration in the case at bar are material in their nature; and that the party insured, having been induced by them to enter into the contract of insurance, had the right to cancel his policy, and was not liable to the company upon his promissory note given for the premium. That case decisively shows that the plaintiff in the case at bar is entitled to maintain his action.

The principal question in the case is as to the measure of the damages which the plaintiff is entitled to recover. It appeared at the trial that the plaintiff was induced by the false representations of the defendant, who was the general agent of the New York Life Insurance Company of New York, to take a fifteen years' endowment policy for $10,000 in said company, and to pay the first premium thereon; that before the second premium became due he discovered the fraud and notified the defendant of his intention to cancel the policy, and demanded the amount of the premium he had paid. It also appeared that the said company was solvent; that the policy until cancelled was a good policy; and that the premium was a fair premium for such a policy. The defendant contended that upon these facts the plaintiff could recover no damages, or at most only nominal damages, contending that the "measure of damages is the difference in money value between what he got and what he would have got had the representations been true."

If the plaintiff had elected to retain his policy, this rule of damages would be correct. Morse v. Hutchins, 102 Mass. 439. But upon discovering the fraud, the plaintiff had his election of two remedies. He could retain his policy, or he could cancel and repudiate it and have resort to the defendant for the fraud prac

Sawyer v. Davis.

ticed upon him. This right of rescinding his contract is important to the plaintiff, as his contract was an executory one extending over fifteen years, and its value depended not merely on the present condition of the company but largely upon its future management. The defendant cannot control this election. The plaintiff had the right to and did elect to cancel the policy; his notice to the defendant, the agent of the company, was a cancellation; he could not thereafter maintain an action against the company; and he had in his hands no property of value to be returned.

We are of opinion that under these circumstances he has a right to recover damages of the defendant to an amount which will put him in the same position as if the fraud had not been practiced on him. As a consequence of the fraud he has paid out a sum of money as a premium for which he has got nothing. We think he is entitled to recover it of the defendant. The contention of the defendant that the cancellation of the policy was the cause of the loss of the premium paid, seems to us to be a refinement which leads to unjust results. The fraud of the defendant was the cause both of the payment by the plaintiff and of the cancellation. If he had not cancelled the policy he would perhaps not have lost the premium he had paid, but the exercise of this incidental right of cancellation cannot in any legal sense be said to be the cause of his loss. To hold, as the defendant claims, would be to deprive the plaintiff of his right of election for the benefit of the defendant. We are therefore of opinion that the instructions given at the trial were sufficiently favorable to the defendant.

Exception overruled.

SAWYER V. DAVIS.

(136 Mass. 239.)

Constitutional law — statute authorizing act enjoined as nuisance.

The ringing of mill-bells at a certain hour having been enjoined as a nuisance, the legislature may authorize the ringing at that hour.*

BILL

ILL of review. The plaintiffs were restrained by a decree made October 1, 1881, from ringing a bell on their mill before the

* See Davis v. Sawyer (133 Mass. 289), 43 Am. Rep. 519.

Sawyer v. Davis.

hour of six and one-half o'clock in the morning; which decree was affirmed September 7, 1882. March 28, 1883, the legislature passed an act, which took effect upon its passage, as follows: "Manufacturers and others employing workmen are authorized, for the purpose of giving notice to such employees, to ring bells and use whistles and gongs of such size and weight, in such manner and at such hours as the board of aldermen of cities and the selectmen of towns may in writing designate." April 18, 1883, the selectmen of Plymouth licensed the plaintiffs to ring the bell on their mill in such manner and at such hours, beginning at five o'clock in the morning, as they were accustomed to do prior to the injunction. The bill prayed that the injunction might be dissolved, or the decree might be so modified as to enable the plaintiffs to act under the license without violating the decree. The defendants demurred; case reserved.

C. G. Davis, for defendants.

F. D. Allen, for plaintiffs.

C. ALLEN, J. Nothing is better established than the power of the legislature to make what are called police regulations, declaring in what manner property shall be used and enjoyed, and business carried on, with a view to the good order and benefit of the community, even although they may to some extent interfere with the full enjoyment of private property, and although no compensation is given to a person so inconvenienced. Bancroft v. Cambridge, 126 Mass. 438, 441. In most instances, the illustrations of the proper exercise of this power are found in rules and regulations restraining the use of property by the owner, in such a manner as would cause disturbance and injury to others. But the privilege of continuing in the passive enjoyment of one's own property, in the same manner as formerly, is subject to a like limitation; and with the increase of population in a neighborhood, and the advance and development of business, the quiet and seclusion and customary enjoyment of homes are necessarily interfered with, until it becomes a question how the right which each person has of prosecuting his lawful business in a reasonable and proper manner shall be made consistent with the other right which each person has to be free from unreasonable disturbance in the enjoyment of his property. Merrifield v. Worcester, 110 Mass. 216, 219; s. c., 14 Am. Rep.